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RFID Group Targets Patent Woes

A group of 20 companies that develop RFID-based products—chips, tags, labels and readers—have formed an intellectual property licensing consortium to ease the pain increasingly associated with both hardware and software development.

The goal of the group is twofold: to offer an efficient patent management system for those companies applying for a radio-frequency-identification-based patent and to provide access to RFID patents for manufacturers and users.

Despite having been around for the past 50 years with little fanfare, RFID technology has recently proliferated with mandates from the likes of Wal-Mart Stores Inc., the Department of Defense and the Department of Homeland Security that require suppliers to tag their goods.

"Because of [proliferation], the number of patents and patent holders has made for a complex situation," said Stan Drobac, vice president of RFID strategy and planning at Avery Dennison Corp. and the consortiums spokesperson, in Pasadena, Calif. "Its being referred to as a patent thicket—interlocking patents that can block participants from making products."

Further reading

The group, dubbed the RFID Consortium, will base its work on the standards and specifications put out by EPCglobal Inc., which develops standards for the Electronic Product Code and RFID technology. It will also take into account those standards put out by the International Organization for Standardization, a counterpart to EPCglobal.

The consortium is proposing a license agreement whereby all patents owned by members will be pooled and available to interested companies via a single license at a fair and reasonable price. The license model is based on those already in place with DVD formatting and MPG-2 video decoding technology vendors that also pool patents—and hire an independent party to distribute license fees.

One notable exception to the consortium is Intermec Technologies Corp. The tag and reader manufacturer has been at loggerheads with other technology companies over its Rapid Start Licensing Program, which tightly controls licensing around its 145 patents—many of which address core functionality, particularly with respect to EPCglobals Gen2 standard for RFID readers.

However, Intermecs absence from the consortium will not hinder its effectiveness, according to Erik Michielsen, an analyst at ABI Research, in Oyster Bay, N.Y.

"Regardless of how Intermecs IP issues are resolved, there are dozens of other IP holders in the market that are looking to profit from EPC Gen2 licensing," said Michielsen. "Because of the number and disparity of such patents, the industry, in the absence of a process like the one now beginning, would be heading for stagnation and quagmire."